Combination of Stratasys and MakerBot expected to drive faster
adoption of desktop 3D printing by extending the Stratasys product
offering to include a full range of 3D printing capabilities

MINNEAPOLIS & REHOVOT, Israel — (BUSINESS WIRE) — June 19, 2013 —
Stratasys
Ltd. (NASDAQ:
SSYS), the leader in 3D printing and additive
manufacturing, and
MakerBot,
the leader in desktop 3D printing, today announced the signing of a
definitive merger agreement whereby privately held MakerBot has agreed
to merge with a subsidiary of Stratasys in a stock-for-stock
transaction. MakerBot, founded in 2009, helped develop the desktop 3D
printing market and has built the largest installed base of 3D printers
in the category by making 3D printers highly accessible. The company has
sold more than 22,000 3D printers since 2009. In the last nine months,
the MakerBot Replicator 2 Desktop 3D Printer accounted for 11,000
of those sales.

The combination of these two industry leaders is expected to drive
faster adoption of 3D printing for multiple applications and industries,
as desktop 3D printers are becoming a mainstream tool across many market
segments. Upon completion of the transaction, MakerBot will operate as a
separate subsidiary of Stratasys, maintaining its own identity, products
and go-to-market strategy. The merger enhances Stratasys’ leadership
position in the rapidly growing 3D printer market, by enabling Stratasys
to offer affordable desktop 3D printers together with a seamless user
experience. The merger is expected to be completed during the third
quarter of 2013; and it is subject to regulatory approvals and other
conditions customary for such transactions.

The MakerBot 3D Ecosystem drives the accessibility and rapid adoption of
their desktop 3D printers. It includes Thingiverse.com, the largest
collection of downloadable digital designs for making physical objects,
and which is empowered by a growing community of makers and creators.
The MakerBot 3D Ecosystem also includes MakerWare software, MakerCare
service, MakerBot Filament, the MakerBot Retail Store, the MakerBot 3D
Photo Booth, and strategic partnerships with Autodesk, Adafruit, Nokia,
OUYA, MoMA and Amazon. MakerBot recently announced it will further
extend its 3D Ecosystem with the MakerBot Digitizer desktop 3D scanner.

MakerBot’s products are increasingly used by prosumers, including
engineers, designers, architects, manufacturers, entrepreneurs and
individuals, for professional purposes, as well as for personal
applications. Bre Pettis, CEO and co-founder of MakerBot, will continue
to lead the company. Pettis is a leader in the 3D printing industry,
with a mission to drive further adoption of the company’s products.

“MakerBot’s 3D printers are rapidly being adopted by CAD-trained
designers and engineers,” said David Reis, Stratasys CEO. “Bre Pettis
and his team at MakerBot have built the strongest brand in the desktop
3D printer category by delivering an exceptional user experience.
MakerBot has impressive products, and we believe that the company’s
strategy of making 3D printing accessible and affordable will continue
to drive adoption. I am looking forward to working with Bre,” added Reis.

“The last couple of years have been incredibly inspiring and exciting
for us,” noted Pettis. “We have an aggressive model for growth, and
partnering with Stratasys will allow us to supercharge our mission to
empower individuals to make things using a MakerBot, and allow us to
bring 3D technology to more people. I am excited about the opportunities
this combination will bring to our current and future customers.”

Transaction Details

Under the terms of the merger agreement, Stratasys will initially issue
approximately 4.76 million shares in exchange for 100% of the
outstanding capital stock of MakerBot. The proposed merger has an
initial value of $403 million based on Stratasys’ closing stock price of
$84.60 as of June 19, 2013. MakerBot stakeholders also qualify for
performance-based earn-outs that provide for the issue of up to an
additional 2.38 million shares through the end of 2014. The proposed
earn-out payments have an initial value of up to $201 million based on
the Stratasys closing stock price as of June 19, 2013. Those payments,
if earned, will be made in Stratasys shares or cash (in an amount
reflecting the value of the Stratasys shares that would have otherwise
been issued at the relevant earn out determination date), or a
combination thereof, at Stratasys’ discretion. The merger is expected to
accelerate Stratasys’ growth rate and be slightly dilutive to Non-GAAP
earnings per share in 2013, and accretive to Stratasys'
Non-GAAP earnings per share by the end of 2014.

Operating Structure

Stratasys intends for MakerBot to operate as a separate subsidiary,
preserving its existing brand, management, as well as the spirit of
collaboration it has built with its users and partners. Together with
Stratasys, MakerBot will continue to innovate, expand its product
offering, provide attentive service to its users and make more 3D
printing content available through Thingiverse.com.

Upon completion of the merger, Stratasys and MakerBot will jointly
develop and implement strategies for building on their complementary
strengths, intellectual property and technical know-how, and other
unique assets and capabilities. The opportunities could include
accelerating MakerBot’s reach by leveraging Stratasys’ global
infrastructure; cross-promotion of products into the installed base of
the combined companies; and leveraging Stratasys’ extensive know-how in
Fused Deposition Modeling (FDM) to benefit MakerBot’s product line.